The Implications of the New Google Ad Layout Change

On February 19 2016 Google started to roll out one of the most significant changes to its AdWords Paid Search Ads Programme since its inception, sixteen years ago, with the removal of the Right Ad Sidebar, the original location of its ads.

Google has been testing different ad formats and layouts for a number of years and we have been noticing a number of searches where no right sidebar appeared where it would normally, however it now seems to have been rolled out in a fairly widespread fashion and, despite no official mention yet on AdWords or on the AdWords blog, a Google spokesperson confirmed the change to Search Engine Land.

Essentially the change means the desktop/tablet search layout is now much closer to the layout of the mobile search page, as mobile continues to take a larger and larger proportion of search traffic, with no right hand sidebar, other than when Google Shopping Ads or the Knowledge Panel appear.

Since Google moved some Paid ads from their original spot on the right hand of the results page to the top of the listings, the click through rate of these top of the page ads became significantly higher than ads on the right hand side. And, although the cost per click of these Right Hand Side ads tended to be lower, the effectiveness and relative conversion rates that we were seeing was significantly lower.

Top Ads were also rewarded with added benefits called Ad Extension such as site links, call extensions, social extensions, review extensions, callout extensions and more. This gave top ads even more real estate and meant they were the only real game in town.

It was suggested that Google will show four ads in the top spot, rather than the usual three, for terms that are considered Highly Commercial Queries. These are seen as queries in which Google perceives an intent to purchase. However, from what we have experienced, this counts for most of the ads that we normally see.

This will mean that the click through rate of the extra one or two of the top 4 ads, i.e. position 4, as well as 3 in some cases, will now increase significantly, in line with the higher CTR’s seen in position 1-2 or 1-3, compared to the right hand sidebar previously.

I have been seeing ad extensions in 3 of the top 4 ads so far, which again will increase click through rate. I am yet to see 4 but that does really depend on whether extensions were set up for that particular ad.

We had already seen a change in the paid search landscape in that the Top of Page Ads were generally occupied by the more serious players with well-crafted and optimised ads, where there were often poorer quality and/or less relevant ads in the right hand side, such as the bid on everything eBay ads and aggregator ads. This switch to up to 4 top of page ads, plus 3 bottom of page ads will concentrate advertisers and push the low quality ads out of the game

The loss of ad revenue from the sidebar ads will inevitably be replaced by Google Shopping ad revenue and, though we are still only seeing 8 ads max, this might change. I would also anticipate those top shopping spots will also become more valuable and Cost per Click of these ads will rise, sometimes significantly.

The loss of the Right Hand Sidebar (RHS) ads will mean that advertisers will only get 4 opportunities for top of page visibility, compared to the 3 + 6-8 opportunities previously and so will compete much more aggressively for these top 4 spots, although it may mean some weaker competitors exit the auctions. It will also focus serious competition on crafting and optimising their ads to ensure they do appear there.

This heightened competition will inevitably influence CPC and we expect the cost of these top 4 ads to rise significantly. We would also anticipate that the 3 results at the bottom of the page will also be more desirable that those RHS ads and have a higher CPC.

The original move to top of page ads had already had a fairly dramatic impact on organic results, in that these top of pages ads were seen by many as of an equivalent relevance to the top organic results and many people who didn’t trust those ads on the right hand side, seemed to click on the top of page ads much more readily. The move to top of page, plus the increasing space given to the ads with the rise in extensions has reduced the number of organic results above the fold significantly. Now increasing the number of top of page ads to 4 will mean that in many searches (certainly the ones I have conducted) we are only seeing 1 organic result without scrolling. This is going to make top organic spots even more valuable and competitive.

The change of format will undoubtedly see significant change in the search landscape, although it would be good to see some formal announcement from Google, and you rather suspect they are keeping quiet until the dust has settled and they have measured the impact.

I think it will definitely improve the quality and relevancy of AdWords ads and make them a more usable source of information. It will also make AdWords a much more competitive and expensive environment and advertisers will need to spend significantly more time and effort on ensuring that they are getting optimum performance from their AdWords Accounts.

There is a danger that this will benefit bigger advertisers who can afford to invest larger sums on their advertising, especially given the reducing visibility of organic search results. That said you would expect users to increase the volume of their searches to find the information, products and services that they require, so the opportunities for all are still there.